A popular Cork City gym that went into liquidation this month owing €625,000 is now debt free and more attractive to potential buyers, according to the liquidator.
Gerard Murphy, of Gerard Murphy & Co, St Mary’s Rd, Midleton, Co Cork, told a creditors’ meeting yesterday that the €355,866 owed to staff and the €288,248 owed to creditors, largely members, of Source Health and Fitness Ltd, Tivoli, Cork, had “gone off the slate” with no transfer of undertakings, as the business had not been sold as a going concern.
“There are no legacy scenarios with Source, it’s a clean bill of health,” he said.
Employees were not left in the lurch in terms of monies owed. Mr Murphy said most of the roughly 30 staff will get “pretty close on 90%” and in some cases 100%, of what they are owed, through the Department of Social Protection. He would be addressing their entitlements first.
Members who paid by Visa debit/credit card or Mastercard in the last 12 months may be able to reclaim from their bank or credit card company, he said, and he would supply documentation to support their claim once he received the relevant details.
One member told the meeting she had already successfully reclaimed from her bank. However, Noreen O’Brien, also a member, said she had paid €395 by cheque on June 5 — and she will receive nothing back.
Those who paid by cash, cheque, or standing order will not recover their debt.
Nonetheless, Ms O’Brien said she could not speak highly enough of the staff at Source, particularly swimming coach Eilish Byrne.
Mr Murphy said the decision to close the gym complex, which has a 25m swimming pool, creche and beauty salon, was taken on June 30 and that anyone who paid subscriptions on July 2 or after will be refunded in full, unless it was in relation to a past debt.
The somewhat tragic circumstances behind the gym’s closure began with the death from cancer in 2005 of Gavin Comiskey, the man who bought the complex in 2002. His sister-in-law, Julie Lacey, told creditors that her sister, Gavin’s wife, then became a director, but she passed away five years later, also of cancer. This led to Ms Lacey and her niece Lisa Comiskey becoming directors and taking over “to try and keep things afloat, so we are actually here by circumstance”.
Ms Lacey said the complex struggled economically and they had tried, over the years, to dispose of it as a going concern. In fact, it was on the point of being sold for €5m in 2006, but the deal fell through. Ms Lacey said they subsequently worked with the National Asset Management Agency (Nama) to try and sell the complex.
Rent has not been paid on the premises for a number of years but Nama is not seeking to recover it, Mr Murphy said, “so Nama’s contribution to this is in the order of half a million”.
Mr Murphy said neither Ms Lacey nor Ms Comiskey had drawn expenses or salaries from the business for years.
Mr Murphy commended the staff for the good order in which the premises was left.
“Most places that have got into trouble have gone downhill and my biggest problem is dirt and waste. I’ve been through [Source] and I must commend them on its spotlessness”.
Mr Murphy said he will not be following the “standard liquidation scenario of rushing in to cannibalise the place” and he has told the receiver the equipment will remain for the next few weeks in case a buyer is found.
The creditors’ meeting, at the Vienna Woods Hotel, was devoid of acrimony and several creditors, all members, spoke highly of Source staff.
Noel McEvoy of Lovers’ Walk, Tivoli, said it had been a big part of his family’s life for 15 years.
Another member said the staff were the gym’s “greatest asset”, which prompted a round of applause.
Mr Murphy said he recognised it was “an institution” that had served the city since 1985, and the objective was to take it forward. He said it was “notable” that creditors were “not giving out about money” at the meeting, and were more concerned about the loss of a social outlet.
He said when it first opened as part of Fitzpatrick’s Hotel, it was “unusual and new in Cork”, but there were now a multitude of fitness centres and swimming pools. For it to continue, membership fees would have had to increase substantially, he said.
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